Overpayment Issue

Rockie

We converted payroll the beginning of the year and we recently found an error where an employee has been overpaid since this time. It concerns me because this is a substantial overpayment which would have been noticeable on the paycheck ($500/pay period).

It bothers me because this employee has not mentioned it or questioned as to why there was such a drastic change in her salary. We are going to have her pay it back, probably through payroll deduction. I am sure she will raise an issue that it's our error so she should not have to pay it back.

How would you guys handle this sticky situation?

Roberta

Bring her in. Explain the situation. Offer a memorandum of explanation and have her sign it authorizing the payroll deduction.

If you have had five payrolls as we have had, you are about $2,500 short. Keeping it is fraud.

Crout

Assuming that your state has a wage law similar to Pennsylvania's (many states do) you must get the EE's signed permission for any deductions that are not mandated by law. The choice for the EE is either authorize the deduction or face termination. If the EE quits rather than authorize the deduction you would have to either sue the EE for the amount, or take the loss.

Balloonman

You might have your payroll person check, if it is direct deposit within so many days you can "withdraw" a mistake like that........at least for the last overpayment.
I would be hard pressed to believe that she did not notice such a large amount. I could believe not noticing $50.00 a check, but $500.00, give me a break.
Is it possible her husband handles all the finances and she has not even looked at a pay stub? (Just putting out a possibility.)
My $0.02 worth.
DJ The Balloonman

rad

I am always amazed when this happens. You know that an underpayment would be noticed right away. But anyway, we deduct 10% of the total overpayment a week until it is paid back.

AJ SPHR

I would do as others suggested - prepare memo to give to employee, but also explain to them verbally what happened and give them a day or two to notify us over what period of time they'd like to pay the amount back and get their signature.

To those who can't believe an employee didn't notice this - I can believe it only because I'm one of those typical employees who never opens their direct deposit advice, nor do I check my bank account to verify it was deposited! In fact, I have to look at the HRIS system to remind myself what my annual salary is if I need it for some form. I know, I know, I should know better, especially since payroll is an HR responsibility here, but I've never paid attention to my paychecks. Ok, one more confession - I don't balance my checkbook either! #-o

AJ SPHR

p.s. - hey I just noticed that my total number of posts went over 100 today!:DD
Uh, I think that's a good thing and not an indication that I'm starting to spend far too much time here ...x:-8

Pork

ROCKIE: 1st Step up and take credit for the error, (which it appears you have already done). 2ndly, do not openly question the honesty of the ee. 3rdly, set up the plan for re-payment leaning to the ee's side for how severe the re-payment is to be. 4thly, make sure you have a company policy and procedure already written out so that no one will doubt what happens when someone's pay is plused "up or down". If the shoe was on the other foot the ee and the company would be jumping through the hoops to fix the ee's pay check, as soon as possible and yesterday if it were possible. That boat don't rock the same way for we employers!!!!

PORK